All of us know that employee theft has always been in existence but the real question is how often does it happen and how much. Every business has experienced employee theft some time in one form or the other. Moreover, a lot of employees have even accepted to have stolen items from the workplace.
As per an estimation, 33% of corporate bankruptcies in the US have been linked to employee theft. There could be several reasons why employees commit workplace fraud and this translates to a hefty revenue loss.
It is true that embezzlers need some reason, motive to commit their crime. But, it’s quite hard to pinpoint the same. This blog has pulled out all the currently available data on employee fraud to give you a proper understanding of the issue. Keep reading to find out!
Employee Theft Statistics That You Need To Know
- 75% of employees have admitted that they have stolen from their employer at least once (Statistic Brain)
- 37.5% of employees have stolen at least 2x times from their employer. (Statistic Brain)
- 18% of the employee theft cases were misappropriation schemes that involved noncash assets (Association of Certified Fraud Examiners, 2020)
- Employee theft is the reason behind 43.7% of the total inventory loss suffered in US stores (Statistic Brain)
- 37% of embezzlers are found working in finance or accounting (Hiscox)
- Larger companies with around 500 employees or more face only 24% of the embezzlement cases.
- Usually, occupational fraud perpetrators have no prior criminal records but 4% of them have a criminal record or a fraud history.
- Risk of billing fraud and payroll schemes is twice as high in small businesses as compared to that in large enterprises.
- The employee theft prosecution data has suggested that generally 14 months pass by between the time when a scheme starts and when it gets detected.
- A recent study suggests that the most common methods used by perpetrators to conceal all employee thefts includes forging fraudulent physical documents (40%), altering physical documents (36%), altering electronic documents or files (27%), creating fraudulent electronic documents (26%). However, 12% did not at all try to conceal the fraud
- Over 40% of the cases get uncovered via tips from an employee, customers, vendors, etc. (Association of Certified Fraud Examiners)
- As per the employee fraud case statistics, 59% of all ex-employees have admitted to stealing sensitive information of the company while leaving previous jobs.
- As per the recent global workplace theft stats, the industries with the highest percentage of corruption include energy (53%), manufacturing (51%), and government and public administration (50%).
- About 70% of all recently analyzed corruption cases had been perpetrated by a manager, executive, owner, or a person in a similar authority position.
- Median age of an employee involved in workplace theft (someone who committed fraud, larceny, or embezzlement at work) was 49 years old on average. (Hiscox)
- Stats revealed that 42% of people who commit workplace frauds lived beyond their means. On the other hand, 26% of occupational fraudsters had been experiencing financial difficulties). (Association of Certified Fraud Examiners)
- 1 in every 5 employees at tech companies steals from work
- Middle East and North Africa have the highest rate of male employee theft at 92% while North America has the least rate at 64%. The global average of males who were involved in employee theft is at 69%.
- In the US, employee theft has been committed by 59% men and 41% women
- 56% of fund thefts are perpetrated by female workers.
- Employees who have a high school education along with a bachelor’s degree are 34% more likely to commit workplace theft.
- Statistics suggest embezzlers have worked for around 8 years with the company they steal from. (Hiscox)
- 38% of employees who commit occupational fraud fall in the age group 36 to 45.
- Employees are more likely to group up and steal from the company together. 75% of all embezzlement incidents at companies involve more than one perpetrator.
- 65% of employee theft cases are uncovered by another employee in the company who notices that something is missing (Hiscox)
- The company presses charges against 45% of the total employee theft cases.
- There are several methods and techniques used by employees to steal. Stealing company property or private property of the company owners or employees is one of the top 5 methods and techniques used by embezzlers. (Hiscox)
- 40% of fraudsters have faced some sort of HR-related red flags before they had committed the crime. (SHRM)
Impact of Employee Theft On Businesses
- 95% of businesses have suffered from workplace theft. (California Restaurant Association)
- 29% of employee theft cases have lasted for more than 5 years. (Hiscox)
- 52% of employees have stolen office supplies like pens, paper, or have admitted to using the company printer for personal profit.
- 7% of retail companies have said to have had an increase in inventory shrinkage in 2019
- When someone is not at work, then you can’t clock them. This is known as buddy punching which along with other similar time theft schemes affect around 75% of all businesses in the US. (Replicon)
- It has been found that men have been involved in 72% of all employee theft cases (Association of Certified Fraud Examiners, 2020)
- As per the small business employee theft statistics, around 60% of all cases have ongoing schemes ranging from 2 weeks to 20 years. (National Federation of Independent Business)
- Employee theft and crime is one of the main reasons why 30% of the business fails. (US Chamber of Commerce)
Employee Theft Cost Faced By Organisations
- Average loss for employee theft cases that went on for 5 years or more was $2.2 million. For cases that lasted 10 years or more, the average loss was $5.4 million. (Hiscox)
- The most common type of employee theft is asset misappropriation schemes (86%). This is the least costly type of fraud ($100,000 median loss).
- The financial statement fraud schemes are the least common (10% of cases) but the most costly ones ($954,000)
- 33% of business bankruptcies in the US are an outcome of employee theft. This results in $50 billion annual loss.
- 7% of a company’s revenues are lost to employee theft and fraud.
- Companies lose $1,509,000 on an average for every fraud case (Association of Certified Fraud Examiners)
- The smaller businesses with less than 100 employees have had the highest median loss at $150k (Association of Certified Fraud Examiners)
- 19% of employee theft cases involves owners and business executives but it caused a median loss of $850,000
- Around 21% of employee fraud cases caused more than $1 million of financial losses as per a 2020 survey. (Association of Certified Fraud Examiners)
- US businesses can lose up to $110 million per day due to employee-related crimes. (Hire Power Associates)
- The public and private companies around the world underwent a median loss of $150,000 to occupational fraud in 2020.
- As per the corporate fraud stats, male perpetrators have caused much larger median losses ($150,000) than female perpetrators ($85,000)
- 83% of female employees working at tech positions admitted to stealing items valued in the range of $1 to $19. The rate for male tech employees involved in workplace theft is 65%. Also, only 9% of female tech employees took high-valued items worth $100+ as compared to 17% of male counterparts.
- Fraudsters who had been associated with a company for over 10 years reported to have stolen a median of $200,000 from the company.
These employee theft statistics must have been eye-opening for you. You might find it very hard to cope with the current employee theft stats. But, there are ways to bring the current demographics under control and improvise it as well.
Make clear cut policies and let all employees know that very strict actions will be taken if someone commits a crime at the workplace. Also, while hiring, a background check will help filter out potential fraudsters. Other than that, you can also initiate a system of checks and balances and carry out impromptu audits to further diminish the possibilities of any fraud.
There’s not a speck of doubt that the employee embezzlement stats are highly concerning. However, you shouldn’t be micro-monitoring your employees’ behaviors with a microscope. Understand the problem and take up preventative measures as and when possible and you will be good to go!